Weigh these words by Energy Minister/Pdvsa President Rafael Ramirez on 4 June at the official opening of a new Pdval food store.

“The essence of the revolution is to satisfy the needs of the people. The issue of feeding (the people) attends to the essence of the revolution, and we are moving in that direction. We have found a deviation, a problem that must be attended, and we are attending it…the revolution is deepening the construction of (the state’s) hegemony in the food sector, with the intention of minimizing the private sector’s participation in the production of food… until the moment comes when the State has (total) control of processing and transportation in that (food) sector. With Chavez everything; (but) without Chavez (there is) nothing.”

Ramirez’s words must be taken literally, particularly since he received a public endorsement from the president amid the growing scandal over the loss of over 70,000 tons of food imported mainly by Pdval, a subsidiary of Pdvsa. The regime is actively “investigating” how so much food was lost. Three interim scapegoats already have been jailed, including former Pdval president Luis Enrique Pulido, former general manager Ronald Flores, and former executive director of operations Vilyeska Betancourt. When Pulido served as Pdval’s president, he reported directly to Energy Minister Ramirez.

However, it’s possible that these scapegoats will become accusers as the “investigation” unfolds. In the past 48 hours, the official version of how the food was lost is that the state-owned importer (Pdval) contracted out the transportation/storage to private companies; meaning: “it’s the private sector’s fault.”

Ultimas Noticias, a pro-government daily aimed squarely at “el pueblo,” reports that Sebin is investigating the existence of a mafia within Pdval that was working with corrupt private sector companies to deliberately declare imported food unfit for human consumption, and then sell that food illegally to private vendors who would place it in local markets.

This alleged mafia inside Pdval has an ongoing criminal enterprise with private companies, all unnamed except Grupo Sahect (sic) in Cojedes, which is reported to have 47 warehouses that it leases to Pdval to store dry and refrigerated food. The operations of the Pdval mafia were brought to the regime’s attention by two former Pdval officials who have not been identified.

Message to the pueblo: The Pdval scandal is the private sector’s fault, but the revolution will apply correctives quickly.

Chavez’s expanding assault against the privately owned food sector is not a recent development in his plans to transform Venezuela into a Cuban-style regime and perpetuate his rule indefinitely. The regime’s offensive has been under way since 2005, when Chavez started to expropriate millions of hectares of privately owned agriculture and livestock assets. He also seized silos, warehouses and transportation companies, and took over downstream processing companies. The regime’s expropriation spree accelerated in November 2009 when disgraced Bolibourgeois “entrepreneur” Ricardo Fernandez Barrueco was jailed indefinitely at Sebin’s Helicoide HQ and his numerous agricultural enterprises – all tightly connected to the regime – were nationalized.

Corporación Venezolana de Alimentos, S.A. (CVAL), created by Presidential Decree No. 7,236 published in Official Gazette No. 39,376 of 1 March 2010, is the new Bolivarian entity responsible for directing the consolidation of the regime’s total control over food production, processing and distribution. CVAL’s authority and powers are very broad, covering every aspect of food production, processing, transportation, distribution, importation and exportation. CVAL will be controlled by the agriculture minister aka Vice President Elias Jaua, the president’s chief attack dog in the food wars.

Meanwhile, the regime is dismissing as a non-issue the discovery in recent days of 3,597 containers (as of 5 June) in Puerto Cabello, Tinaquillo and Valencia. Sure, the Attorney General has jailed three former Pdval officials. But moving forward, current Pdval head Virginia Mares says that an electorally-motivated dirty war has been launched against Pdval and Pdvsa because the revolution “now provides 33% of the basic basket to the pueblo and that makes the opposition tremble.”

But the 70,000 tons of spoiled food can be traced directly to regime incompetence and corruption. It’s not surprising that there’s corruption in Pdval, a Pdvsa subsidiary. Pdval and Bariven, the other Pdvsa subsidiary that buys food internationally, are exempted from compliance with any of the many rigid rules that the regime has imposed on private food importers. The National Guard does not inspect containers imported by Pdval, Bariven, and Mercal. Seniat tax authorities do not inspect the import manifests and other shipping documentation. No one confirms if the food that is purchased/imported by these government entities is in compliance with international sanitation and safety standards.

Infrastructure breakdowns and presidential tantrums have been aggravating factors.

Chavez nationalized Venezuela’s ports to protect Venezuelan sovereignty, and then created Bolipuertos with the Cuban regime as a partner. Since Bolipuertos has been in charge, maintenance of essential equipment like cranes and refrigeration facilities has practically stopped, and management is more focused on ideology and political issues than the actual nuts and bolts of running commercial seaports. Puerto Cabello sources claim that practically all of the port’s cargo cranes are broken down, and its refrigerated storage/transportation infrastructure cannot handle the large volumes of food arriving at the port. These sources also say that the National Guard and Seniat are always grinding down private importers with endless layers of “burrocracy” compounded with “bajadas de mula.” However, the big regime importers like Pdval and Mercal, which account for over half of the food imports handled at Puerto Cabello, are never inspected and are not accountable to anyone. This situation repeats at the country’s other major ports, including La Guaira and Maracaibo.

Chavez’s decision to suspend trade with Colombia, also roiled the country’s ports and disrupted important component of the food supply chain. Two-way trade with Colombia was almost $6 billion a year when Chavez closed the border, with about $5 billion of that favoring Colombia. A big piece of that was processed and fresh food. Food imported from Colombia could be placed in Venezuela overland in 48 hours tops, but now it takes up to two months to complete import transactions with new suppliers in Brazil, Argentina and New Zealand.

The president’s land theft policies also have inflicted lasting damage on the country’s food sector. Production has fallen dramatically in the millions of hectares of land that Chavez has stolen since 2005. Chavez babbles about food sovereignty, but Venezuela’s dependency on food imports has grown substantially during the Bolivarian era. Imports now account for over 70% of the food supply, by some estimates.

But Chavez doesn’t care about the failure of his revolutionary “policies” or his regime’s incompetence or corruption as he pursues the core goal of asserting total state control over the country’s food production, transportation and distribution. This was confirmed on 4 June by the president’s trusted henchman, Ramirez. In fact, the regime’s incompetence and corruption arguably serves a grater revolutionary purpose, by strengthening official arguments that the revolution must accelerate its efforts to take total control of the food sector. Any food lost because of incompetence or corruption during the process is simply explained away as inevitable speed bumps on the road to true “freedom” (serfdom) for the pueblo.

3 Responses to Food Wars

I think PDVAL never reported directly to Ramirez. Asdrubal Chavez has frequently said he was very proud to have it under his division, and encouraged pestering reporters to talk more about PDVAL and less about refinery outages.

CG response: Right inside the president’s family circle. But our sources insist that Pdval’s jailed former president did “rendir cuentas” directly to Ramirez. In writing about the corruption of other senior Chavez satraps, we have not focused as much as we should have on Ramirez, Asdrubal Chavez and their crews inside Pdvsa.

You could replace “Bolipuertos” with “the New PDVSA” in the comment regarding lack of investment and maintenance, where production has dropped over 20% (depending on info source, could be more than 30%) from 3.2 MM BPD to less than 2.5 MM BPD in the revolutionary age. The outlook for crude production is not good (see World Oil editorial, May 2010, pg 7, “Disaster in Venezuela”). It is no stretch to see where the food supply is headed. No importa, hay muchos gordos..

I really don’t like the idea at all of these guys controlling the food and water supply. The worst part of it all is that there seems to be no way of stopping this and when you control food and water, you just put your grip onto everything. September just seems so far away and it is bad tasting even before it happens. Is this coming to an end?